With technology on the rise, it is no surprise people are becoming accustomed to paying for items with their phones. With applications such as Apple Pay, PayPal, and Google Wallet making it easy for customers to pay online, companies of all sizes started to accept mobile payments as well.
While the convenience of paying for everything with a smartphone brings plenty of benefits, it certainly brings a few drawbacks with it. It is important to take these risks into consideration before switching your startup over to accepting mobile payments.
Mobile Payments Benefits
The trend is quickly catching up with customers. Should you jump right into it? Here are the many advantages of mobile payments for startups. Let’s take a look.
One of the benefits of mobile wallet payments is the convenience. When it’s easy to make a mobile payment the customer will spend more money on your services or products.
A customer is more likely to have their phone on them when they see an item they would like to have rather than their credit card, right? Many companies have already adopted this practice with dozens of examples to vouch for it. Even laundromats are jumping on board and allowing customers to make mobile payments with their e-CleanPay service, instead of using coins to operate their washing machines.
Another benefit of mobile payments comes to the ease of interacting with mobile customers to encourage them to shop in your store. For example, those who bring their phone out to check for item prices, coupons, or product descriptions are more likely to pay with their mobile phone than those who aren’t engaged with your company online.
2. Access To Valuable Information
Encouraging your customers to pay with their mobile device will also provide you access to powerful data that can easily improve your business.
Some of these mobile apps often provide information about the customer that your sales team can implement in their processes. This will improve your sales and survey ratings, all while keeping your customers happy. Using these apps can also help you keep track of your businesses personal information such as your inventory and when you should order more.
3. Cost Reduction
Converting your smartphone into a POS (point of sale) device is much more simple and cost-efficient than purchasing a traditional POS system. Using an app or card reader on your mobile device will also cut the costs of receipt paper and ink since you can email the receipt straight to the customer’s device.
Mobile Payments Drawbacks
After highlighting the advantages of setting up mobile payments in your startup, it is important next to check on the drawbacks.
1. Security Risks
One of the most widely known risks of accepting payments with a mobile phone is the possibility of data breaches. When customers decide to pay with their mobile devices, they are trusting you with their information. If for some reason this information should be compromised, it could cause tense relationships between your customer and your business, harming your brand.
2. Inconvenience For Some Customers
Many people are set in their ways and would rather pay for items with a debit or credit card. For businesses having to choose between solely accepting mobile payments or regular payments, this may be an important point to think over.
3. Too Many Alternatives To Choose From
Everyone’s devices are different, and not all mobile payment application treat devices in the same way. For example, a user with PayPal may be good to pay using mobile phone credit at your business, but a Google Wallet user may not be able to. It is important to read the fine print before choosing a platform and to inform your customers of what mobile payments you can accept before starting the transaction.
Speaking of fine print, it’s also very important to note the fees your application may charge you for using their software. Some applications charge a swipe fee for transactions while others charge for manual payments, so beware before signing up.
4. Constant Update Needed
While some see the fact that turning your device into a POS system to accept mobile payments is much cheaper than buying a traditional system, it may actually cost you in the long run.
Whatever device you’re using, you will need to keep up with the updating POS software and eventually will become outdated. For example, many users are currently switching to phones that can support NFC (Near Field Communication). If you keep your device running long enough that it becomes unable to update to keep up with the requirements to run mobile payments, you will have to upgrade your device.
Also, on top of having to have at least semi-recent technology, you are also required to keep a strong internet connection to make it possible for your startup to process mobile payments. This may be an added cost that your startup is not ready for yet.
Have you implemented mobile payments in your startup? Do you see an increase in usage of mobile payments within your user base? Share your experience in the comment section below.